Coral Laboratories Ltd (Market Cap 211 Cr)
Incorporated in 1994, Coral Laboratories Ltd is in the business of pharmaceutical formulations
Coral Laboratories Ltd has 20 years of experience in Manufacturing of Pharmaceutical formulations.
Coral Laboratories Limited manufactures various pharmaceutical formulations at three at Baroda, Daman Dehradun & Vasai .
To manufacture pharmaceutical formulations like tablets, capsules, liquid and topical preparation, the company went into public issue in March 94 at a total cost of Rs.2.5 Cr
Product categories
a) Non-Sterile:
This comprises Capsules, Tablets, Dry syrup,
etc. in Antibiotics/Antibacterial, Anti-fungal, Gastro-Intestinal Drugs, etc.
b) Sterile:
This category includes Injectables, Eye Drops,
Ear Drops, Nasal Sprays, and large volume Parenteral.
c) Nutraceuticals:
The company provides a wide range of nutraceutical products such as dietary supplements, herbal / phytochemicals,
multi-vitamins, and nutrients.
d) OTC+Lifestyle:
The company provides products in the
range of Female Hygiene, Contraceptives, Medical Devices, Skin Care, Infant & Child
Care products, and Herbal products.
Lets study their product category separately ( Industry Study )
Difference between sterile and non sterile
Sterile products are completely free from any live microorganisms. These are usually injected or infused into the body (bypassing the skin or digestive tract), so they must be 100% contamination-free.
Non Sterile products are products that do not need to be free of all microorganisms, but must meet acceptable microbial limits set by pharmacopoeias.
Non-Sterile: In Capsules, Tablets, Dry syrup form which includes Antibiotics/Antibacterial, Anti-fungal, Gastro-Intestinal Drugs, etc.
Let’s divide this in two domestic and export market
Indian market : Highly competitive especially in antibiotics and gastro- intestinal drugs.
Mostly large and mid level pharma companies have this in their portfolio.
Demand driven by Large populations,Prescriptions via GPs and hospitals,Frequent infections and seasonal illness.
Margins: Typically low to medium (10–18% EBITDA)
Export Market : High-volume but low-margin export segment.Key markets are Africa, Southeast Asia, CIS, and Middle East.
Regulated markets (US, EU) Very competitive unless product is differentiated or niche.india is a major exporter of non-sterile generics globally.
So we can assume this category gets high revenue and volumes but low margins.
Sterile products which includes Injectables, Eye/Nasal/Ear Drops, Parenterals
In Indian market
In India we can see growing demand after covid for critical care, anti-infectives.
In this category the entry barrier is high because of strict compliance. And these categories also get opportunity in ophthalmics, large volume injectables, inhalation therapies.
In this generally the EBITDA margins are between 20-28%.
Export Market
In sterile products Indian players get strong demand from US, EU is USFDA and EMEA approved. And africa, latin america, etc which can see tender business, branded generics. And coral laboratories are also mainly in contract manufacturing.
The sterile injectables are fastest growing indian pharma exports more than 12% cagr.
NUTRACEUTICALS which includes Herbal, Dietary Supplements, Multivitamins
In indian market
In urban areas growth can be more than 20% cagr. Because of preventive healthcare. Key players are himalaya,zydus wellness, abbott, healthkart.
Market size in FY24 is inr 55,000 crore and expected to double by 2030. And in this segment we can see 25-30% EBITDA margins
Export Market
Us,europe, uae, are the key regions because of the rise of ayurveda base and clean label nutraceuticals.
Export is still small at $1.2 – 1.5 billion in FY24, but growing rapidly.
OTC & LIFESTYLE PRODUCTS
Includes Female hygiene, Herbal products, Medical devices, test kits, Skin care, Child care
In india market
There is a large and growing demand half from pharma, and half from FMCG
Notable areas: Sanitary products (whitening creams, hygiene wipes, pads),OTC meds (Vicks, Crocin), Herbal skin care (Patanjali, Himalaya)
Margin depends on brand strength , FMCG-like pricing and distribution.
₹20,000+ Cr market in FY24.
Export Market
Selective demand included skin care, herbal otc, and hygiene.
In africa demand for basic OTC & Hygiene is more in middle east
Niche Market
From Sterile segment
Now we know that the company is mainly in branded and generic formulation and doing contract manufacturing but also there are niche products whose market size is currently low.
So in their small volume liquid injection. We can see Milrinone Injection and Esmolol Hydrochloride Injection which currently have low market size and are also critical products.
Milrinone Injection
In 2024 global milrinone market size is USD 250 million and expected to reach USD 400 million by 2033, growing at a rate of 6.5% CAGR.
Uses in specialised inotrope with ICU/heart-failure usage.
In milrinone there is very limited competition from neon labs, sanofi.
So there is Significant demand in critical-care, but low volume compared to commodity injectables. Niche with moderate growth.
Esmolol Hydrochloride Injection
Global market size of esmolol hydrochloride injection is USD 150 million in 2024 and projected to reach USD 250 million by 2033 that means growing at 7.5% CAGR.
In India mainly used by hospital/ critical care use. There are limited suppliers in India that can cost INR 250 per ampoule.
Esmolol is a critical short-acting beta-blocker, but usage is confined to perioperative and ICU scenarios making it niche.
Small Volume Liquids Injections
This are further niche products which have high export needs
Here in this figure you can see their market size in india as well as globally
Eye drops, ear drops, nasal sprays large volume parenterals 
These products are from eye drops, ear drops, nasal sprays, large volume parenterals which has small market size, specialist demand, and limited manufacturing—with global and India market size estimates additional Low Market Size + High Specialty Demand + Few Players).
Now this is from non sterile category where we have huge competition but also the company have some niche products
We have another category name suppositories
Now this is highly specialize market in india their are 5-10 companies are there but no know have the diverse range like coral labs have
Wide base of SKUs (23+), including rare ones (Ketoprofen, Interferon, prostate peptides).
Therapy includes pain, infection, hemorrhoids, constipation, and women’s health.
Strong candidate for institutional orders (especially pediatric & anti-fungal).
Export potential in Africa, Latin America, Southeast Asia, and Russia/CIS where suppositories are more commonly prescribed.
Management
Mr. Girish Dhameja (Whole Time Director):
Mr. Girish M Dhameja is a commerce post graduate holding Diploma in Financial Accounting and Diploma in Exim Management.
His present profile includes handling export enquiry finalization and execution of order, business development, Product expansion and Production follow-up, logistics Operations, Tenders Business and Regulatory Coordination. Past remuneration-Rs. 224310/-p.m.
His Linkedin profile shows 23 years of experience in the company.
Mrs. Sushma Kadkade (Director & CFO): Mrs. Sushma Kadkade is a graduate in commerce. She holds an advanced diploma in computer software applications from “TULEC” A division of TATA infotech and postgraduate diploma in finance management. She has very extensive accounting Knowledge of around 20 years.
Geographical Wise Revenue
Fy25 results have been released but their annual report or any other details is not yet released so we can see revenue till FY24 in which we can see if their domestic contribution increases and their EBITDA margins can decrease.
And further in FY24 their 19% revenue is from Ethiopia which is in africa they have strong presence in africa and African countries. As we discussed previously they are getting good demand for their sterile, non sterile, otc and nutraceuticals categories.
The company is generating 75% revenue from exports so further we can assume if their margins are increased then their revenue contribution from exports are also increased.
In FY25 their revenue is 115 Cr EBITDA is 26cr with 23% margins this will be mainly from niche products and
Historical Analysis
In FY24 cash flow statements show decreases of INR -24.93 cr indicating other bank balance, which shows amount outflow. And this corresponds exactly to the rise in bank balances, rather than cash equivalents, so increase bank balance from INR 34.27 cr in FY23 to INR 59.21 cr in FY24. so this will be treated as a working capital change and that’s why it is seen as a negative CFO. the same thing happened in FY25 the bank balance increased.
How the Company Has Grown (FY2014 to FY2025)
Revenue growth from around INR 51 cr in FY14 to about INR 115 Cr in FY25 which is more than double in 11 years also we can see profit rose from INR 8 cr in FY14 to INR 24 cr in FY25.
The company is nearly debt free. It took only a small working capital loan of 3.6 cr and has no long term borrowings.
Now their reserves grew from INR 47 cr in FY14 to INR 198 cr by FY25.
Good use of Resources
Despite growth, Coral didn’t build big new factories. Fixed assets like plants and machinery, barely increased from INR 20 crore in FY2014 to INR 23 crore in FY2025.
They have achieved better operation efficiency using existing plants. And inventories have gone down in the last 5 years from INR 22cr in FY21 to INR 10 Cr in FY25.
The company also built strong cash reserves around INR 80 crore in FY2025 mostly in fixed deposits and cash. It also increased investments from ₹1 crore to ₹52 crore over the same period.
Reason for growth
The company now holds a good amount of cash and investments (reserves have jumped) to consider future projects. For now, Coral appears content to generate growth through higher volumes and margins on its current facilities.
Its cash and negligible debt mean it can finance any needed expansion internally, but as of now management has focused on ramping sales especially exports of generics/OTC formulations before committing to new capacity
Coral laboratories has grown revenue and profits mainly by using its existing manufacturing capacity more efficiently and also use of their niche product category offering which enable them good export demand, in africa, ethiopia and rest of the world. They are not dependent on heavy capacity investments.
Cyclicality of Business
This is the price chart of the company since jan 2006
This is the EBITDA margins trend of the company since march 2014
This is price chart of the company since aug 2015
In formulation manufacturer their can be cyclicity because of raw material prices but company is able to mitigate that risk and managing their gross margins above 40 % now after this major ebitda erosion happening from S&G exp and mainly we cans see in FY19 and FY20 which was covid year and margins dropped because of increased in s&g. And another incident when there was a slowdown in the pharma industry in FY23 because of geopolitical issues.
Now in FY24 and FY25 cogs are maintained and S&G also reduced in FY25 which boosted their margins.
Valuation
| Metric |
Value |
Comment |
| Market Cap |
₹214 Cr |
Small cap |
| Current Price |
₹600 |
Down 40% from ₹999 peak |
| Book Value |
₹563 |
P/B 1.07 = Fair valuation |
| Stock P/E |
8.67 |
Very low vs industry PE of 33.4 |
| EV/EBITDA |
3.91 |
Cheap |
| PEG Ratio |
0.31 |
Undervalued for its growth |
| Price to Sales |
1.86 |
Reasonable |
| Profitability & Returns |
|
|
| Metric |
Value |
Comment |
| ROCE |
17.40% |
Decent |
| ROE |
13.10% |
Acceptable |
| ROIC |
14.00% |
Healthy |
| EBITDA Margin |
22.80% |
Strong for generics |
| Earnings Yield |
24.20% |
Attractive |
| Balance Sheet Strength |
|
|
| Metric |
Value |
Comment |
| Cash & Equivalents |
₹79.9 Cr |
Large for a ₹214 Cr market cap |
| Debt |
₹3.56 Cr |
Very low debt |
| Debt/Equity |
0.02 |
Excellent |
| Current Ratio |
7.07 |
Very liquid |
| Interest Coverage |
333 |
No solvency issue |
| Net Worth |
₹201 Cr |
Strong |
| Working Capital |
₹155 Cr |
Ample |
| Investments |
₹52.3 Cr |
Likely in FDs, securities |
Conclusion
Coral operates in niche pharmaceutical segments and maintains a strong RoCE (Ranging above 15–20%).
Market cap is small ₹250–300 Cr range, under-followed and
Zero long-term debt
Balance sheet has significant investments, giving it low or even negative net debt
High cash and short-term investments on books.
Working capital requirement is minimal; business often runs with low receivables.
EV/EBITDA is 3.91 as EV is low , and EBITDA is positive and growing
Though growth is slow, formulation manufacturing offers decent value addition.
No major raw material volatility (Expect Covid and geopolitical issue in FY23) or low-margin trading business.
Private-label B2B exports and formulations for regulated markets.
Minimal Capex Requirement : Coral has been under-utilizing its capital for years,No major capex planned or needed to sustain business.
Might be valuations ignored by institutions – potential for discovery.\
Promoters are very conservative.While not highly aggressive, they’ve avoided dilutions or debt traps.
Only thing is that it is hard to get details of business and the company is yet to discover. Have to wait for the annual report to file so we can get the details of revenue bifurcation and related things. But overall the company looks decent and in good valuation.
Disclaimer : This is for Educational purpose only, it is not any kind of stock recommendation.
